Stanford Financial exes, Romney son form new firm

Published 5:30 am, Tuesday, July 7, 2009

Ten former employees of Stanford Financial Group, the wealth-management firm whose founder was indicted for securities fraud, created an advisory company based in Charlotte, N.C.

Taggart “Tagg” Romney, the oldest son of former Massachusetts Governor and presidential candidate Mitt Romney, will invest in the new firm, called Solamere Advisors, the company said today in a statement.

The 10 founders worked for Stanford in Charlotte for between four and 13 months before the firm closed in February, said Leila Evans, a partner in the new company. Stanford founder R. Allen Stanford has been in custody since June 18 after an indictment by a U.S. grand jury in Houston on charges that he led a $7 billion securities fraud.

“We learned wonderful lessons from an incredibly unfortunate situation,” said Evans, who worked for Stanford for four months after 21 years with Wachovia Corp.’s wealth- management unit. “We learned how to build our firm so those situations can’t happen again.”

Solamere, which also employs one person who didn’t work at Stanford, will use Pershing LLC, a subsidiary of Bank of New York Mellon Corp., and Capital Guardian LLC as its broker- dealers.

Solamere Advisors won’t be a portfolio investment of Solamere Capital LLC, the Lexington, Mass., firm founded last year by Tagg Romney and partners Eric Scheuermann and Spencer Zwick. The founders are putting money into the business along with employees and some local investors in Charlotte, Evans said.

Solamere Advisors’ founders considered aligning with an existing firm, but concluded starting a new company was more compelling, Evans said.

Stanford opened a Charlotte office in 2006 that grew to 35 employees with brokers recruited from Bank of America Corp., Wachovia and other securities firms, according to the Charlotte Business Journal. Ten other former Stanford advisers in Charlotte started a local office for Oppenheimer & Co. earlier this year, according to the Business Journal.

Tagg Romney is a former executive with Reebok International Ltd., Elan Pharmaceuticals and the Los Angeles Dodgers. His father, the co-founder of Boston-based private-equity firm Bain Capital LLC, isn’t a principal in Solamere Capital.